What is Security Token Offering (STO)?
馃挜馃挜[Complete Guide]馃挜馃挜
Part 7
馃敼Potential and Advantages of STOs
Security Token Offering, or STO is expected to grow up to $10 trillion by 2024. The issuance of security tokens is much cheaper compared to other forms of securities due to the fact that they are operated on decentralized markets. This also means that they attract lower legal and accountancy fees, among other costs.
Issuing securities via programmable code aka smart contracts on the blockchain comes with massive benefits for businesses that plan to tokenize their company鈥檚 equities.
馃敼One of the benefits is Legality. Security tokens are regulated financial securities, the same way as stocks are. People dealing with securities don鈥檛 have to worry about transparency or regulations.
馃敼Second one is Functionality. The same way, while traditional utility tokens cannot act as securities, security tokens CAN act as utilities. In other words, with the help of smart contracts, issuers can choose to use the security tokens as a payment method on their platform, network gateway, voting rights, loyalty programs and more.
Liquidity is also beneficial. With security tokens, issuers have got total control over creating more liquidities. This can be achieved by allowing not only international investors but also listing the securities on exchanges.
馃敼Securitizing new assets is also one of the benefits. Tokens are unique in that that they can securitize various forms of assets including both tangible and intangible assets. This has already had some success, with the recent auction of Andy Warhol鈥檚 14 Small Electric Chairs, an iconic contemporary art piece featuring an electric chair, allowing art lovers to buy a share in the painting.
馃拵Read full guide:
https://www.coinspeaker.com/guides/security-token-offering-sto-complete-guide/
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